Weekly Wool Market Commentary 12/05/2016

Wk 46 12/05/2016. The AWEX EMI pushed 19c higher to close on 1287c at Wool Auction Sales conducted in Australia this week. The market continued to be aided by the falling currency exchange rates with the AUD falling a further 1.6c, closing the week around 73.4 usc.

The market posted two positive sale day results with the 17.5-19µ MPG’s recording 30-35c rises whilst the 19.5-22µ MPG’s increasing 5-22c. Once again the best specified (>40nkt) and low VM lots attracted the buyer attention delivering a substantial price premium as the season delivers a two year high in fleece wools above 2%vm and 47% of the offering under 1%.

Skirtings jumped 30-40c especially the best specified and low vm lots, whilst the reducing numbers of crossbreds on offer attracted more spirited bidding for this sector. Cardings posted some extraordinary results, especially in Sydney where the MC indicator increased by 44c (+4%) and for the first time in quite a while is 10c ahead of the other regions MC indicators.

Next week offering increases to 42,914 bales, and given the AUD continues to remain around the 73c mark should attract more interest from the buyers. Looking forward for wool supply for the following weeks, it is projected the offering will fall below 30,000 bales , this is most likely to be due to the widespread rain in the Eastern states slowing deliveries, coupled with the general slowing of shearing in the for sowing (planting) in the wheat belt.

Mike Avery from Southern Aurora Wool reports the forward offer business followed the market with bidding a little stagnant Wednesday. The week closed with a better tone in both the auction and forwards. Spring bidding returned on Thursday with levels at 1,320 in September and discounted 10 cents per month to Christmas. The unpredictable nature of the market continues to bring interest in options. Exporters are pricing through to November but premiums reflect the volatility and risk. The key 21 index traded at 1,395 for May and 1380 in July. The spring levels lifted early in the week with August trading at 1345, September 1335 and November at 1320. ~ Marty Moses